The Emerging NFT Marketplace and How Horse Racing Can Climb Aboard

Pop Culture
Unforgettable moments in history, like California Chrome’s victory in the 2014 Kentucky Derby, are now being marketed, sold, and traded in other sports as crypto-collectibles. Bram Weinstein explores the possibility of a ‘new stable’ in horse racing. (Eclipse Sportswire)

The all-time Gronk spike didn’t take place in an end zone on Super Bowl Sunday. It was after Tampa Bay Buccaneers tight end Rob Gronkowski got out his digital surfboard and rode a wave to millions of dollars in collectibles that he’d created with a branding team just weeks earlier.

NBA Top Shot has taken what are seemingly run of the mill moments from regular season basketball games, turned them into digital highlight packages, placed levels of “scarcity” on their existence, and by the end of spring will have sold $600 million in digital moments to collectors who have an array of motivations.

Horse Racing has always had its door open to investors at all levels to buy into the sport, but it’s merely a mirage for those who’d want to be part of the major race-day experience. For every Funny Cide fairy-tale story, there a million more owners who have their own personal Brinks truck. I’m not complaining about this. Democratized ownership of Kentucky Derby favorites is absurd. Even the stockholders of the Green Bay Packers (I’m one of them) only have so much power. Go read the bylaws.

So how does all of this new modern technology in engagement and collectability translate into the sport we’d all be literally invested in without that pesky price-point issue? This digital world potentially solves a number of issues if you are willing to suspend the necessity to own the real horse on the real farm with the real trainer. In this digital space of crypto-collectibles that can be purchased as NFTs (non-fungible tokens), the market can build an entire digital landscape, and there is no sport that portends to check off every box of immersive experience.

Like the real racehorses, digital breeders can create and recreate offspring as artificial intelligence (AI) off performance grows. There will be an edge for those who dive into the digital bloodstock lineages. Trainers and jockeys will be hired and fired as performance dictates. Venues will probably have certain biases. And the best part is, betting on these races will become commonplace and competitive.

In dreaming of running a real-life syndicate, I had to ask myself a number of questions: Do I have the time or acumen to know how the day-to-day operations of a farm should run? If our group can only afford runners on the non-prime race days and rarely, if ever, be involved in the top tier of the sport, will I find the time spent as worthwhile? Love of the game only goes so far if you are consistently jealous of the groups who use your high-end allowance race as their warm up.

So, considering what my syndicate group would look like, it always comes back to the outcomes that I’ve prioritized: 1) Can we have an investment group with enough capital to solely become fractional owners of horses who are trending toward graded stakes race success? This obviously is a complicated plan, as A) ownership groups would have to be open to selling shares or horses that are trending in that direction and B) We’d have to be on the call list of interested parties. The pros include not having to incur the expenses of training, housing, and treating the athletes. It also gives our group that doesn’t have unlimited funds the opportunity to potentially be part of the biggest race days in the sport.

Priority 2) The race-day experience is more important than the outcome. We are in this not only because we want “our” horse to win but we are there to enjoy the sport, and if the investment focuses on making those experiences the best they can be, success is measured not by the wins and losses but memories created.

This plan feels viable and if those two outcomes pique your interest, DM me. But the other path (and maybe both can be accomplished concurrently) is digital ownership.

What is so interesting about the digital space is everything I just described is possible if you allow yourself to become immersed with one major exception, we won’t be in person at Churchill Downs, eating prime rib, dressed like royalty, and watching a real horse run a real race with a winner’s circle picture potentially in our future.

Still, groups like Zen Racing are building out marketplaces that involve every aspect of horse racing in a digital world. This type of endeavor for the Stronach Groups of the world or frankly America's Best Racing, might be worthwhile investments in the never-ending quest to appeal to a new generation of fans who are mobile first.

Owner Allen Paulson leads Cigar and Jerry Bailey to the winner’s circle. (Anne Eberhardt/Blood-Horse)

What will be interesting is if the digital marketplaces end up in the same place that real horse racing did: unaffordable to the masses to be part of the biggest virtual race days.

But here is the most important question: Let’s say you built an empire in the digital race experience, would being a sheikh in this space feel the same?

As for the collectible marketplace, while I am still waiting for a real Cigar saddlecloth to come my way for Christmas, the digital landscape is wide open with historic races and moments that, if using scarcity as the most imperative criteria, could become lucrative. What would a fan pay for a curated moment of California Chrome’s first race, let alone his Kentucky Derby win? Could trainers, jockeys, and owners do what Gronk did and get designers to recreate historic moments?

In all, this sport which typically moves into new technology with the dexterity of a barge has endless opportunities to dive into a space that may be cresting, but certainly will never be at low tide again. And I, for one, am an eager buyer of all of it.

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